Blackstone Group invests in Crocs

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Crocs headquarters are seen in Quebec City, July 25, 2008.

Crocs Inc said late on Sunday that the Blackstone Group was making a $200 million (145 million euros ) investment that would give it preferred stock and a 13 percent stake in the US-based shoe company.

The stock will have a six percent cash dividend rate, and at any time after three years from the issuance date, if the closing price of Crocs common stock equals or exceeds $29.00 for a period of 20 consecutive trading days, then the preferred stock shares will convert into shares of common stock, the statement read.

The investment allows the private equity group to have two seats on the board of directors of the foam resin shoe company.

Crocs shares closed Friday at $13.33 dollars on the Nasdaq, where it is traded.

The leisure shoe company, founded in 1999 in Niwot, Colorado, is valued at $1.2 billion.

Eighteen months ago Crocs's shares were trading at $22, but suffered from the company's weak performance.

The Blackstone investment will allow Crocs to finance a $350 million stock repurchase program. Once complete, Crocs will have reduced its publicly traded common stock by 30 percent.

“We expect these initiatives to reduce volatility in both our common stock price and our shareholder base and provide a strong foundation to unlock long-term value for our shareholders,” said Crocs chief financial officer Jeff Lasher.

For company CEO John McCarvel, who simultaneously announced his retirement in April, Blackstone's investment “is a vote of confidence in our company and our brand” despite mixed financial performance.

Since its founding Crocs said it has grown into a company that employs 4,500 people and sells more than 55 million shoes a year in more than 90 countries.- AFP

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